AUSTRIAN INVESTORS SHARE THEIR VIEWS
Ciprian Dubinciuc, General Manager, Interior Resources
Last year was extremely difficult for business. The problems, however, were not necessarily triggered by the economic downturn, but were caused by the unexpected difficulties that a young market-oriented economy like Romania had to face. Very few companies knew what to expect, so the fast decrease in business caught them off guard. The downturn was significant but not devastating, and our predictions for 2010 are not so pessimistic. We even expect a slight growth in the volume of business, as companies have already adjusted to the new market conditions.
Nonetheless, we cannot expect major economic improvements before the lenders resume their regular services to businesses and individuals. Even so, the positive trend posted by Romania’s industrial production sector could represent a point of interest for Austrian companies, which could consider the possibility of using production facilities in Romania rather than simply distributing goods manufactured in their home country.
The challenges in this market are related to bureaucracy, corruption and the lack of transparency in the case of legal procedures. But I suppose that most companies operating here have already got used to such issues and have proven that they can overcome them. As for prospective development targets, investing in a small production facility would be a nice goal for 2010 – 2011. The market offers a highly competitive environment, dominated by the economic crisis, which will not allow companies to keep their market positions unless they are capable of offering the best services to their clients.
Viorel Leca, General Manager, Gebruder Weiss Romania
Last year was very difficult for Gebruder Weiss, given the overall economic context. In April 2009 we moved to the new terminal in Bolintin Deal (Giurgiu) following a 17 million Euro investment. For 2010 we expect an increase of around 10 – 15 per cent on last year’s 15.6 million Euro turnover, based on our strong technical capabilities and firm commitment to the Romanian market.
Romania continues to offer abundant skilled labor at competitive rates. We have identified opportunities in several manufacturing industries and in services and IT. The geographical and cultural proximity to main markets in Europe is a major advantage versus offshore alternatives in Central Asia or the Far East. The infrastructure still needs major efforts at political level, backed by appropriate funding. At the same time, a more deregulated labor market will encourage potential employers and eventually help the creation of a more flexible and competitive workforce.
In the first quarter of 2010 Gebruder Weiss started operations at a rented cross-docking terminal in Craiova. The Group also agreed to an investment of our own in a new terminal in Sibiu, which will play a key role in our cross docking distribution system in Romania. The launch of the project is planned for September 2010. As well, we are analyzing the feasibility of a similar project in the Arad – Timisoara area. At the same time, we are focusing on developing our sales team and customer service support for our clients and partners.
The competition is getting more intense in all segments of our business. Transport companies have suffered important losses in the last few years and we expect more consolidation in this segment. In the area of warehouse logistics, the local players are making efforts to increase their know-how and levels of service, but this is a lengthy process. As for the international players, they are at different stages of development and we have seen some caution given the current difficult context.
The challenge for the more skilled logistics service providers is to be able to offer integrated solutions that incorporate not only inbound transport but also logistics warehousing, value added services, Electronic Data Interchange (EDI) integration with their customers and distribution for national markets or clusters of countries.
Paul Koch, CEO, Kika
The Kika concept has been tailored to meet European requirements and yet allows for country-specific adaptation. In this sense we respect, consider and react to local demands. For example, Kika works together with local producers and suppliers. This supports the local economy, on the one hand, and provides customers with a choice of local as well as international products, on the other.
The importance of adapting to local markets and local demand is a key success factor concerning expansion. Simultaneously, it poses a challenge when trying to accommodate diverse business climates, varying spending capacities, customer needs as well as different cultures and mentalities.
The next targeted city in our expansion plan for Romania is Constanta. We are also planning a second Kika furniture store in Bucharest. We have developed our strategies for Romania, taking into consideration the current economic situation. In 2010 we still expect tight market conditions in Romania and will continue our search for new locations for Kika, both in Romania and in other countries in CEE. We are also confident our sales will improve in 2010.
Last year was extremely difficult for business. The problems, however, were not necessarily triggered by the economic downturn, but were caused by the unexpected difficulties that a young market-oriented economy like Romania had to face. Very few companies knew what to expect, so the fast decrease in business caught them off guard. The downturn was significant but not devastating, and our predictions for 2010 are not so pessimistic. We even expect a slight growth in the volume of business, as companies have already adjusted to the new market conditions.
Nonetheless, we cannot expect major economic improvements before the lenders resume their regular services to businesses and individuals. Even so, the positive trend posted by Romania’s industrial production sector could represent a point of interest for Austrian companies, which could consider the possibility of using production facilities in Romania rather than simply distributing goods manufactured in their home country.
The challenges in this market are related to bureaucracy, corruption and the lack of transparency in the case of legal procedures. But I suppose that most companies operating here have already got used to such issues and have proven that they can overcome them. As for prospective development targets, investing in a small production facility would be a nice goal for 2010 – 2011. The market offers a highly competitive environment, dominated by the economic crisis, which will not allow companies to keep their market positions unless they are capable of offering the best services to their clients.
Viorel Leca, General Manager, Gebruder Weiss Romania
Last year was very difficult for Gebruder Weiss, given the overall economic context. In April 2009 we moved to the new terminal in Bolintin Deal (Giurgiu) following a 17 million Euro investment. For 2010 we expect an increase of around 10 – 15 per cent on last year’s 15.6 million Euro turnover, based on our strong technical capabilities and firm commitment to the Romanian market.
Romania continues to offer abundant skilled labor at competitive rates. We have identified opportunities in several manufacturing industries and in services and IT. The geographical and cultural proximity to main markets in Europe is a major advantage versus offshore alternatives in Central Asia or the Far East. The infrastructure still needs major efforts at political level, backed by appropriate funding. At the same time, a more deregulated labor market will encourage potential employers and eventually help the creation of a more flexible and competitive workforce.
In the first quarter of 2010 Gebruder Weiss started operations at a rented cross-docking terminal in Craiova. The Group also agreed to an investment of our own in a new terminal in Sibiu, which will play a key role in our cross docking distribution system in Romania. The launch of the project is planned for September 2010. As well, we are analyzing the feasibility of a similar project in the Arad – Timisoara area. At the same time, we are focusing on developing our sales team and customer service support for our clients and partners.
The competition is getting more intense in all segments of our business. Transport companies have suffered important losses in the last few years and we expect more consolidation in this segment. In the area of warehouse logistics, the local players are making efforts to increase their know-how and levels of service, but this is a lengthy process. As for the international players, they are at different stages of development and we have seen some caution given the current difficult context.
The challenge for the more skilled logistics service providers is to be able to offer integrated solutions that incorporate not only inbound transport but also logistics warehousing, value added services, Electronic Data Interchange (EDI) integration with their customers and distribution for national markets or clusters of countries.
Paul Koch, CEO, Kika
The Kika concept has been tailored to meet European requirements and yet allows for country-specific adaptation. In this sense we respect, consider and react to local demands. For example, Kika works together with local producers and suppliers. This supports the local economy, on the one hand, and provides customers with a choice of local as well as international products, on the other.
The importance of adapting to local markets and local demand is a key success factor concerning expansion. Simultaneously, it poses a challenge when trying to accommodate diverse business climates, varying spending capacities, customer needs as well as different cultures and mentalities.
The next targeted city in our expansion plan for Romania is Constanta. We are also planning a second Kika furniture store in Bucharest. We have developed our strategies for Romania, taking into consideration the current economic situation. In 2010 we still expect tight market conditions in Romania and will continue our search for new locations for Kika, both in Romania and in other countries in CEE. We are also confident our sales will improve in 2010.
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